ZENITRON — Audit Report / Information 2023

Nov 15, 2023

ZENITRON CORPORATION

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT DECEMBER 31, 2023 AND 2022

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Zenitron Corporation

Opinion

We have audited the accompanying parent company only balance sheets of Zenitron Corporation (the “Company”) as at December 31, 2023 and 2022, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of material accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s 2023 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company’s 2023 parent company only financial statements are stated as follows:

Valuation of allowance for uncollectible accounts receivable

Description

Refer to Note 4(7)(8), Note 5(2) and Note 6(4) for accounting policies on accounts receivable, accounting estimates and assumptions on impairment assessment as well as details of related impairment, respectively.

The Company assesses impairment of accounts receivable based on historical experience and takes into consideration the customers’ historical default records and current financial conditions to estimate expected loss rate in recognising loss allowance. In addition, the Company provides full allowance for uncollectible accounts from individual customers where there is an indication that they are individually identified as impaired or a credit impairment actually occurred. As the assessment of allowance for uncollectible accounts is subject to management’s judgment and estimates in determining the future collectability, such as management’s assessment of customer’s credit risk, we considered the valuation of allowance for uncollectible accounts receivable from individual customers a key audit matter.

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How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Understood and evaluated related policies and internal control of the credit risk management and accounts receivable impairment.

2. Assessed the calculation logic of year-end accounts receivable ageing report provided by management, reviewed the related supporting documents and verified it against the accounting records to ascertain the accuracy of the ageing classification.

3. For those material accounts receivable individually identified by the management to have been impaired, reviewed the supporting documents of impairment assessment provided by the management to assess the reasonableness of collectability.

4. Selected samples of significant overdue accounts receivable amounts and examined their subsequent collections.

Assessment of allowance for inventory valuation losses

Description

Refer to Note 4(11), Note 5(2) and Note 6(5) for accounting policies on inventory valuation, accounting estimates and assumptions and details of allowance for valuation losses, respectively.

The Company is mainly engaged in sales of electronic components. The Company measures ending inventories at the lower of cost and net realisable value and provides allowance for inventory valuation losses based on usable condition of inventories that were individually identified as obsolete. As the life cycle of such inventories is short, the market is competitive, and the assessment of allowance for valuation of inventories individually identified as obsolete often involves management’s subjective judgment, we considered the estimation of inventory valuation loss a key audit matter.

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How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Understood and evaluated the internal control procedures over the Company’s inventories individually identified as obsolete.

2. Understood the Company’s warehousing control procedures, reviewed the annual physical inventory count plan as well as participated and observed the annual physical inventory count in order to assess the effectiveness of the procedures the management used to identify and control obsolete inventories.

3. Obtained the details of inventories that were individually identified as obsolete by the management, reviewed the related supporting documents and verified it against the accounting records.

4. Selected samples of inventory items and examined whether the net realisable value basis was consistent with the Company’s policies, and checked the accuracy of the net realisable value calculation on individual inventory item numbers.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ responsibilities for the audit of the parent company only financial

statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

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1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

2. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

3. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

4. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Chen, Chin-Chang Liao, Fu-Ming For and on behalf of PricewaterhouseCoopers, Taiwan March 8, 2024

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The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ZENITRON CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(4) 7 7 6(5) 6(2) 6(3) 6(6) 6(7) 6(8) 6(10) and 8 6(23) 8	December 31, 2023 AMOUNT % $ 803,025 5 32,651 - 790 - 6,340 - 3,629,422 24 603,155 4 49,785 - 668,306 4 4,736,142 31 182,642 1 10,712,258 69 45,948 - 520,256 4 3,615,886 23 363,093 3 4,001 - 35,405 - 113,546 1 53,872 - 4,752,007 31 $ 15,464,265 100	December 31, 2022	December 31, 2022
		AMOUNT $ 803,025 32,651 790 6,340 3,629,422 603,155 49,785 668,306 4,736,142 182,642 10,712,258 45,948 520,256 3,615,886 363,093 4,001 35,405 113,546 53,872 4,752,007 $ 15,464,265	AMOUNT $ 689,960 16,994 810 11,996 3,970,521 917,381 59,460 663,182 5,493,321 198,726 12,022,351 7,116 572,561 3,647,334 367,295 699 35,948 153,144 46,488 4,830,585 $ 16,852,936	%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Notes receivable, net Accounts receivable, net Accounts receivable - related parties Other receivables Other receivables - related parties Inventories, net Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred income tax assets Other non-current assets Total non-current assets Total assets				4 - - - 24 5 - 4 33 1
				71
				- 4 22 2 - - 1 -
				29
				100

(Continued)

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ZENITRON CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes 6(11) 6(12) 7 7 6(8) 6(13) 6(18) 6(13) 6(23) 6(8) 6(14) 6(15) 6(13) 6(16) 6(17) 9 11	December 31, 2023 AMOUNT % $ 5,849,533 38 897,895 6 2,537 - 1,950,797 13 83,761 - 317,324 2 172,228 1 102,348 1 2,930 - 108,068 1 30,965 - 9,518,386 62 - - 114,468 1 1,086 - 63,019 - 178,573 1 9,696,959 63 2,282,388 15 44,532 - 1,329,391 9 941,886 6 899,726 6 269,383 1 5,767,306 37 $ 15,464,265 100	December 31, 2022	December 31, 2022
		AMOUNT $ 5,849,533 897,895 2,537 1,950,797 83,761 317,324 172,228 102,348 2,930 108,068 30,965 9,518,386 - 114,468 1,086 63,019 178,573 9,696,959 2,282,388 44,532 1,329,391 941,886 899,726 269,383 5,767,306 $ 15,464,265	AMOUNT $ 7,560,518 897,758 2,477 1,278,043 44,815 335,488 394,256 152,445 570 - 19,967 10,686,337 456,426 114,479 129 74,002 645,036 11,331,373 2,184,054 841 1,118,544 854,384 1,105,399 258,341 5,521,563 $ 16,852,936	%
Current liabilities Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Accounts payable - related parties Other payables Other payables - related parties Current income tax liabilities Current lease liabilities Long-term liabilities, current portion Other current liabilities Total current liabilities Non-current liabilities Bonds payable Deferred income tax liabilities Non-current lease liabilities Other non-current liabilities Total non-current liabilities Total liabilities Equity Share capital Common stock Certificate of entitlement to new shares from convertible bonds Capital surplus Capital surplus Retained earnings Legal reserve Unappropriated retained earnings Other equity interest Other equity interest Total equity Significant contingent liabilities and unrecognised contract commitments Siginificant subsequent events Total liabilities and equity				45 5 - 8 - 2 2 1 - - -
				63
				3 1 - -
				4
				67
				13 - 6 5 7 2
				33
				100

The accompanying notes are an integral part of these parent company only financial statements.

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ZENITRON CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

Items

Year ended December 31 2023 2022 Notes AMOUNT % AMOUNT % 6(18) and 7 $ 14,367,156 100 $ 19,452,860 100 6(5) and 7 ( 12,936,842) ( 90) ( 18,139,539) ( 93) 1,430,314 10 1,313,321 7 ( 1,600) - ( 1,600) - 1,600 - 1,600 - 1,430,314 10 1,313,321 7 6(21) ( 482,470) ( 3) ( 509,278) ( 3) ( 223,933) ( 2) ( 232,986) ( 1) 6(4) ( 610) - 722 - ( 707,013) ( 5) ( 741,542) ( 4) 723,301 5 571,779 3 7 24,043 - 7,216 - 6(19) and 7 60,699 - 55,818 - 6(20) 68,829 1 ( 26,001) - 6(22) and 7 ( 231,099) ( 2) ( 162,153) ( 1) 6(6) ( 47,072) - 375,147 2 ( 124,600) ( 1) 250,027 1 598,701 4 821,806 4 6(23) ( 142,727) ( 1) ( 107,234) ( 1) $ 455,974 3 $ 714,572 3 6(14) ($ 4,613) - $ 3,547 - 6(3) 85,353 1 ( 122,886) - 27,918 - - - 6(23) 922 - ( 709) - ( 12,293) - 254,490 1 $ 97,287 1 $ 134,442 1 $ 553,261 4 $ 849,014 4 6(24) $ 2.03 $ 3.30 $ 1.93 $ 3.03

Operating revenue Operating costs Gross Profit Unrealised gain from sales Realised gain from sales Net Gross Profit Operating expenses Selling expenses General and administrative expenses Expected credit impairment (loss) gain Total operating expenses Operating profit Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of (loss) profit of associates and joint ventures accounted for using equity method, net Total non-operating income and expenses Profit before income tax Income tax expense Profit for the year Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss (Losses) gains on remeasurements of defined benefit plan Unrealised gains (losses) from investments in equity instruments measured at fair value through other comprehensive income Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translation of foreign financial statements Other comprehensive income for the year Total comprehensive income for the year Earnings per Share (in dollars) Basic earnings per share Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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ZENITRON CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Year ended December 31, 2022 Balance at January 1, 2022 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2021 earnings Cash dividends Legal reserve Disposal of investments in equity instruments designated at fair value through other comprehensive income Conversion of convertible bonds Balance at December 31, 2022 Year ended December 31, 2023 Balance at January 1, 2023 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2022 earnings Cash dividends Legal reserve Disposal of investments in equity instruments designated at fair value through other comprehensive income Conversion of convertible bonds Balance at December 31, 2023	Notes		Capital	Capital	Capital		Capital surplus		Retained	Earnings	Earnings	Other Equity Interest	Other Equity Interest		Total equity
			Share capital - common stock		Certificate of entitlement to new shares from convertible bond				Legal reserve		Unappropriated retained earnings	Exchange differences on translation of foreign financial statements	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(3) 6(17) 6(3) 6(13)(15)(16) 6(3) 6(17) 6(3) 6(13)(15)(16)		$ 2,138,249 - - - - - - 45,805 $ 2,184,054 $ 2,184,054 - - - - - - 98,334 $ 2,282,388		$ - - - - - - - 841 $ 841 $ 841 - - - - - - 43,691 $ 44,532		$ 1,036,486 - - - - - - 82,058 $ 1,118,544 $ 1,118,544 - - - - - - 210,847 $ 1,329,391		$ 766,625 - - - - 87,759 - - $ 854,384 $ 854,384 - - - - 87,502 - - $ 941,886	$ 1,066,524 714,572 2,838 717,410 ( 748,387 ) ( 87,759 ) 157,611 - $ 1,105,399 $ 1,105,399 455,974 ( 3,902 ) 452,072 ( 660,390 ) ( 87,502 ) 90,147 - $ 899,726		($ 235,226 ) - 254,490 254,490 - - - - $ 19,264 $ 19,264 - ( 12,293 ) ( 12,293 ) - - - - $ 6,971	$ 519,574 - ( 122,886 ) ( 122,886 ) - - ( 157,611 ) - $ 239,077 $ 239,077 - 113,482 113,482 - - ( 90,147 ) - $ 262,412	$ 5,292,232 714,572 134,442 849,014 ( 748,387 ) - - 128,704 $ 5,521,563 $ 5,521,563 455,974 97,287 553,261 ( 660,390 ) - - 352,872 $ 5,767,306

The accompanying notes are an integral part of these parent company only financial statements.

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ZENITRON CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Unrealised gain from sales Realised gain from sales Depreciation and amortisation Expected credit loss (gain) Net gain on financial assets at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of subsidiaries and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Notes and accounts receivable Accounts receivable - related parties Other receivables Inventories, net Other current assets Changes in operating liabilities Notes and accounts payable (including related parties) Other payables (including related parties) Other current liabilities Other non-current liabilities Cash inflow generated from operations Interest received Interest paid Income tax paid Net cash flows from operating activities

Year ended December 31 Notes 2023 2022 $ 598,701 $ 821,806 1,600 1,600 ( 1,600 ) ( 1,600 ) 6(21) 16,709 14,714 6(4) 610 ( 722 ) 6(2)(20) ( 2,990 ) ( 1,155 ) 6(22) 231,099 162,153 ( 24,043 ) ( 7,216 ) 6(19) ( 26,077 ) ( 11,348 ) 6(6) 47,072 ( 375,147 ) 6(20) - ( 9 ) ( 11,696 ) 4,001 346,145 843,507 314,226 272,454 10,613 47,936 757,179 ( 404,386 ) 16,084 ( 94,032 ) 711,760 ( 1,200,972 ) ( 235,776 ) 357,432 10,998 4,872 ( 15,596 ) ( 1,483 ) 2,745,018 432,405 24,043 7,216 ( 230,981 ) ( 144,928 ) ( 153,250 ) ( 112,998 ) 2,384,830 181,695

(Continued)

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ZENITRON CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss - non-current Increase in investments accounted for using equity method Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Increase in other receivables - related parties Increase in other non-current assets Dividends received Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term loans Increase in short-term notes and bills payable Payment of lease liabilities Payment of cash dividends Net cash flows (used in) from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2023 2022 $ - ($ 29,920 ) 6(3) 137,677 273,286 ( 39,824 ) ( 7,500 ) - ( 150,000 ) - 66,266 6(7) ( 5,831 ) ( 7,991 ) - 171 ( 929 ) 518 ( 5,124 ) ( 400,261 ) ( 10,039 ) ( 1,865 ) 26,077 11,348 102,007 ( 245,948 ) 6(26) ( 1,710,985 ) 640,740 6(26) 137 198,397 6(26) ( 2,534 ) ( 1,037 ) 6(17) ( 660,390 ) ( 748,387 ) ( 2,373,772 ) 89,713 113,065 25,460 689,960 664,500 $ 803,025 $ 689,960

The accompanying notes are an integral part of these parent company only financial statements.

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ZENITRON CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

Zenitron Corporation (the “Company”) was incorporated as a company limited by shares in October 1982. The Company has been listed on the Taiwan Stock Exchange and started trading since August 26, 2002. The Company is primarily engaged in the sales of electrical components.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These financial statements were authorised for issuance by the Board of Directors on March 8, 2024.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS[®] ”) Accounting Standards that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC and became effective from 2023 are as follows:

2023 are as follows:
New Standards,Interpretations and Amendments Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’ Amendments to IAS 12, ‘International tax reform - pillar two model rules’	Effective date by International Accounting Standards Board
	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

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(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC

but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC and will become effective from 2024 are as follows:

2024 are as follows:
	Effective date by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2024
current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’	January 1, 2024
Amendments to IAS 7 and IFRS 7, ‘Supplier finance arrangements’	January 1, 2024

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRS Accounting Standards as endorsed by the FSC are as follows:

==> picture [486 x 48] intentionally omitted <==

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Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 –	January 1, 2023
comparative information’
Amendments to IAS 21, ‘Lack of exchangeability’	January 1, 2025

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of preparation

• A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:

• (a) Financial assets at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC[®] Interpretations, and SIC[®] Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

(3) Foreign currency translation

The parent company only financial statements are presented in New Taiwan Dollars, which is the Company’s functional and presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

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• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• (a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

• (b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

• (c) All resulting exchange differences are recognised in other comprehensive income.

(4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realised within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

~18~

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(6) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(7) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

~19~

(8) Impairment of financial assets

For financial assets at amortised cost, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(9) Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

－ (10) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(11) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the moving average method. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses.

(12) Investments accounted for using equity method / subsidiaries

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

• B. Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Company are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.

~20~

• D. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

(13) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

==> picture [338 x 41] intentionally omitted <==

(14) Leasing arrangements (lessee) - right-of-use assets / lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable.

~21~

The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(15) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 50 ~ 55 years.

(16) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(17) Borrowings

Borrowings comprise short-term bank borrowings.

(18) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

~22~

(19) Convertible bonds payable

Convertible bonds issued by the Company contain conversion options (that is, the bondholders have the right to convert the bonds into the Company’s common shares by exchanging a fixed amount of cash for a fixed number of common shares) and call options. The Company classifies the bonds payable upon issuance as a financial asset or financial liability in accordance with the contract terms. They are accounted for as follows:

• A. The embedded call options are recognised initially at net fair value as ‘financial assets or financial liabilities at fair value through profit or loss’. They are subsequently remeasured and stated at fair value on each balance sheet date; the gain or loss is recognised as ‘gain or loss on valuation of financial assets or financial liabilities at fair value through profit or loss’.

• B. The host contracts of bonds are initially recognised at the residual value of total issue price less the amount of ‘financial assets or financial liabilities at fair value through profit or loss’ as stated above. Any difference between the initial recognition and the redemption value is accounted for as the premium or discount on bonds payable and subsequently is amortised in profit or loss as an adjustment to the ‘finance costs’ over the period of circulation using the effective interest method.

• C. The embedded conversion options which meet the definition of an equity instrument are initially recognised in ‘capital surplus—share options’ at the residual amount of total issue price less the amount of financial assets or financial liabilities at fair value through profit or loss and bonds payable as stated above. Conversion options are not subsequently remeasured.

• D. Any transaction costs directly attributable to the issuance are allocated to each liability or equity component in proportion to the initial carrying amount of each abovementioned item.

• E. When bondholders exercise conversion options, the liability component of the bonds (including bonds payable and ‘financial assets or financial liabilities at fair value through profit or loss’) shall be remeasured on the conversion date. The issuance cost of converted common shares is the total book value of the abovementioned liability component and ‘capital surplus—share options’.

(20) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(21) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

~23~

B. Pensions

• (a) Defined contribution plan

For defined contribution plan, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plan

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

• ii. Remeasurements arising on defined benefit plan are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

iii. Past service costs are recognised immediately in profit or loss.

• C. Employees’ compensation and directors’ remuneration

Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(22) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

~24~

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

(23) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

(24) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cach dividends are recorded as liabilities.

(25) Revenue recognition

Sales of goods - agency

• A. The Company is an agency of electronic components. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

• B. The Company’s revenue from sales is recognised based on the price specified in the contract, net of the estimated sales discounts. Accumulated experience is used to estimate and provide for the sales discounts, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. The sales usually are made with a credit term of 30~120 days.

~25~

As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money.

• C. A receivable is recognised when the goods are delivered as this is the timing based on trade terms that the consideration is unconditional because only the passage of time is required before the payment is due.

• CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Company’s accounting policies

None.

(2) Critical accounting estimates and assumptions

• A. Valuation of allowance for uncollectible accounts receivable

The assessment of accounts receivable impairment relies on the Company’s judgement and assumption about the recoverable amount of the accounts receivable in the future, taking into account various factors such as client’s financial status, the Company’s internal credit rating, transaction history, current economic condition and others which might affect the client’s repayment ability. Where there is suspicion of recoverability, the Company needs to assess the possible recoverable amount and recognise reasonable allowance. The assessment of impairment depends on reasonable expectation about future events on the basis of the conditions existing at the balance sheet date. The estimation may differ from the actual result and may lead to significant changes.

B. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

~26~

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash

	December	31, 2023	December	31,2022
Cash on hand and revolving funds	$	95	$	192
Checking accounts and demand deposits		802,930		689,768
	$	803,025	$	689,960

• A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The Company has no cash pledged to others.

(2) Financial assets at fair value through profit or loss

		December	31,2023		December	31,2022
Current items
Financial assets mandatorily measured at fair
value through profit or loss
Listed stocks		$	40,964		$	26,902
Non-hedging derivatives - redemption of
convertible bonds			11			47
			40,975			26,949
Valuation adjustments	(		8,324)	(		9,955)
		$	32,651		$	16,994
Non-current items
Financial assets mandatorily measured at fair
value through profit or loss
Beneficiary certificates		$	15,000		$	7,500
Hybrid instruments			32,324			-
			47,324			7,500
Valuation adjustments	(		1,376)	(		384)
		$	45,948		$	7,116

• A. The Company recognised net gain amounting to $2,990 and $1,155 on financial assets at fair value through profit or loss for the years ended December 31, 2023 and 2022, respectively.

• B. The Company has no financial assets at fair value through profit or loss pledged to others as collateral.

• C. Information relating to financial assets at fair value through profit or loss is provided in Note 12(3).

~27~

(3) Financial assets at fair value through other comprehensive income

December 31, 2023 December 31, 2022

Current items
Equity instruments
Emerging stocks		$	2,462		$	2,462
Valuation adjustment	(		1,672)	(		1,652)
		$	790		$	810
Non-current items
Equity instruments
Listed stocks		$	179,568		$	227,098
Unlisted stocks			97,260			97,260
			276,828			324,358
Valuation adjustment			243,428			248,203
		$	520,256		$	572,561

• A. The Company has elected to classify stock investments with steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $521,046 and $573,371 as at December 31, 2023 and 2022, respectively. Without considering any collateral held or other credit enhancements, until the end of the reporting period, the maximum credit risk in relation to the financial loss arising from unsatisfied performance obligation of the counterparties is the carrying amount of financial assets.

• B. The Company sold stock investments at fair value amounting to $137,677 and $273,286 which resulted to a cumulative gain on disposal of $90,147 and $157,611 during the years ended December 31, 2023 and 2022, respectively.

• C. Amounts recognised in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

		YearendedDecember31	YearendedDecember31	YearendedDecember31
		2023		2022
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income - the Company	$	85,353	($	122,886)
Fair value change recognised in other
comprehensive income - investment accounted
for under the equity method		28,129		-
	$	113,482	($	122,886)
Cumulative gains reclassified to retained
earnings due to derecognition	($	90,147)	($	157,611)

~28~

• D. The Company has no financial assets at fair value through other comprehensive income pledged to others as collateral.

• E. Information relating to fair value of financial assets at fair value through other comprehensive income is provided in Note 12(3).

(4) Notes and accounts receivable

		December	31,2023		December	31,2022
Notes receivable		$	6,340		$	11,996
Accounts receivable		$	3,677,976		$	4,018,465
Less: Allowance for uncollectible accounts	(		48,554)	(		47,944)
		$	3,629,422		$	3,970,521

• A. The Company uses historical experience and takes into consideration the customers’ historical default records, current financial conditions and economic conditions of the industry to estimate expected loss rate in recognising loss allowance. In addition, the Company provides for adequate allowance for uncollectible accounts from individual customers where there is an indication that they are impaired based on specific identification or a credit impairment actually occurred and the customers did not provide any collateral.

• B. The ageing analysis of accounts and notes receivable is as follows:

Not past due Up to 30 days 31 to 90 days Over 90 days	December	Notes receivable 6,340 $ - - - 6,340 $ 31,2023	Accounts receivable 3,920,507 $ 4,891 50,038 43,029 4,018,465 $ December	Notes receivable 31,2022
	Accounts receivable 3,604,045 $ 2,358 28,810 42,763 3,677,976 $
				11,996 $ - - -
				11,996 $

The above ageing analysis was based on past due date.

• C. As of December 31, 2023, December 31, 2022 and January 1, 2022, the balances of receivables (including notes receivable) from contracts with customers amounted to $3,684,316, $4,030,461 and $4,876,616, respectively. Without considering any collateral held or other credit enhancements, until the end of the reporting period, the maximum credit risk in relation to the financial loss arising from unsatisfied performance obligation of the counterparties is the carrying amount of financial assets.

• D. The Company considers the characteristic of geographical region, product characteristics, and customer credit rating, applying the simplified approach using the provision matrix based on the loss rate methodology to estimate expected credit loss.

~29~

• E. The Company adjusts historical and timely information to assess the default possibility of accounts receivable, contract assets and lease payments receivable. On December 31, 2023 and 2022, the provision matrix based on the roll rate methodology is as follows:

December 31, 2023 Expected loss rate Total accounts receivable December 31, 2022 Expected loss rate Total accounts receivable	0.15% 3,604,045 $ 0.11% 3,920,507 $ Notpast due Not past due	Up to 30 dayspast due 0.15% 2,358 $ Up to 30 dayspast due 0.11% 4,891 $	31~90 Over 90 dayspast due dayspast due 0.15%-100% 0.15%-100% 28,810 $ 42,763 $ 31~90 Over 90 dayspast due dayspast due 0.11%-100% 0.11%-100% 50,038 $ 43,029 $	3,677,976 $ Total
				Total
				4,018,465 $

• F. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable are as follows:

At January 1 Provision for (reversal of) impairment loss Write-offs At December 31	2023 2022 Accounts receivable Accountsreceivable 47,944 $ 51,314 $ 610 722) ( - 2,648) ( 48,554 $ 47,944 $	2022
		Accountsreceivable
		47,944 $

For provisioned loss for the years ended December 31, 2023 and 2022, the impairment (losses) gains arising from customers’ contracts are ($610) and $722, respectively.

• G. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

(5) Inventories

Merchandise inventories Inventories in transit		December31,2023
	Allowance for Cost valuation loss 5,075,577 $ 523,127) ($ 183,692 - 5,259,269 $ 523,127) ($		Bookvalue
			4,552,450 $ 183,692
			4,736,142 $

~30~

Allowance for Cost valuation loss Merchandise inventories 6,001,247 $ 731,296) ($ Inventories in transit 223,370 - 6,224,617 $ 731,296) ($ December31,2022	Bookvalue 5,269,951 $ 223,370
	5,493,321 $

The cost of inventories recognised as expense for the year:

			Year ended December 31	Year ended December 31	Year ended December 31
			2023		2022
Cost of goods sold		$	13,120,728	$	17,625,499
(Gain on reversal of) loss on decline in market value	(		183,886)		514,040
		$	12,936,842	$	18,139,539

The gain on reversal of decline in market value for the year ended December 31, 2023 was due to the Company’s disposal of slow-moving inventory.

(6) Investments accounted for using equity method

• A. Subsidiaries accounted for using equity method

December 31, 2023 Zenitron (HK) Limited 544,405 $ Supertronic International Corp. 2,895,340 Zenicom Corporation 176,141 3,615,886 $		December31,2022
		606,433 $ 2,872,256 168,645 3,647,334 $

• B. Share of profit (loss) of subsidiaries accounted for using equity method

		YearendedDecember31	YearendedDecember31	YearendedDecember31
		2023		2022
Supertronic International Corp.	($	5,178)	$	359,851
Zenitron (HK) Limited	(	49,857)		19,137
Zenicom Corporation		7,963	(	3,844)
Yo-Teh Investment Corporation		-		3
	($	47,072)	$	375,147

Refer to Note 4(3) of the consolidated financial statements for the year ended December 31, 2023 for the information regarding the Company’s subsidiaries.

~31~

(7) Property, plant and equipment

At January 1, 2023 Cost Accumulated depreciation 2023 Opening net book amount as at January 1 Additions Depreciation charge Closing net book amount as at December 31 At December 31, 2023 Cost Accumulated depreciation At January 1, 2022 Cost Accumulated depreciation 2022 Opening net book amount as at January 1 Additions Disposals Depreciation charge Closing net book amount as at December 31 At December 31, 2022 Cost Accumulated depreciation

Buildings and Transportation Office Land structures equipment equipment Total 252,592 $ 334,227 $ 41,047 $ 70,670 $ 698,536 $ - 242,390) ( 32,199) ( 56,652) ( 331,241) ( 252,592 $ 91,837 $ 8,848 $ 14,018 $ 367,295 $ 252,592 $ 91,837 $ 8,848 $ 14,018 $ 367,295 $ - - 700 5,131 5,831 - 2,824) ( 2,973) ( 4,236) ( 10,033) ( 252,592 $ 89,013 $ 6,575 $ 14,913 $ 363,093 $ 252,592 $ 334,227 $ 41,747 $ 75,689 $ 704,255 $ - 245,214) ( 35,172) ( 60,776) ( 341,162) ( 252,592 $ 89,013 $ 6,575 $ 14,913 $ 363,093 $ Buildings and Transportation Office Land structures equipment equipment Total 252,592 $ 334,227 $ 43,037 $ 63,747 $ 693,603 $ - 239,150) ( 30,503) ( 54,606) ( 324,259) ( 252,592 $ 95,077 $ 12,534 $ 9,141 $ 369,344 $ 252,592 $ 95,077 $ 12,534 $ 9,141 $ 369,344 $ - - - 7,991 7,991 - - 157) ( 5) ( 162) ( - 3,240) ( 3,529) ( 3,109) ( 9,878) ( 252,592 $ 91,837 $ 8,848 $ 14,018 $ 367,295 $ 252,592 $ 334,227 $ 41,047 $ 70,670 $ 698,536 $ - 242,390) ( 32,199) ( 56,652) ( 331,241) ( 252,592 $ 91,837 $ 8,848 $ 14,018 $ 367,295 $

• A. The significant components of buildings and structures include main building and auxiliary building, which are depreciated over 55 and 15 years, respectively.

• B. The Company has no property, plant and equipment pledged to others as collateral.

~32~

(8) Lease arrangements – lessee

Right-of-use assets: Buildings and structures Lease liabilities: Current Non-current	December31,2023 Carrying amount 4,001 $ 2,930 $ 1,086 4,016 $	December31,2022
		Carrying amount
		699 $
		570 $ 129
		699 $

• A. The Company leases various assets including buildings. Rental contracts are typically made for periods of 2 to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise transportation equipment, buildings and structures. Low-value assets comprise office equipment. Right-of-use asset and lease liabilities were not recognised for these leases.

• C. The depreciation charges on right-of-use assets are as follows:

Buildings and structures	YearendedDecember31
	2023 2022 2,549 $ 1,037 $

• D. For the years ended December 31, 2023 and 2022, the additions to right-of-use assets were $5,851 and $0, respectively.

• E. Except for the depreciation charge, the information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term leases and leases of low-value assets	Year ended December31	Year ended December31
	2023 63 $ 687	2022
		15 $ 658

• F. For the years ended December 31, 2023 and 2022, the Company’s total cash outflow for leases were $3,284 and $1,710, respectively.

~33~

－ (9) Lease arrangements lessor

For the years ended December 31, 2023 and 2022, the Company recognised rent income in the amounts of $7,323 and $7,130, respectively, based on the operating lease agreement, which does not include variable lease payments.

(10) Investment property

		Land			Buildings		Total
January 1, 2023
Cost	$		32,466	$	29,941	$		62,407
Accumulated depreciation
and impairment	(		15,410)	(	11,049)	(		26,459)
	$		17,056	$	18,892	$		35,948
2023
Opening net book amount
as at January 1	$		17,056	$	18,892	$		35,948
Depreciation charge			-	(	543)	(		543)
Closing net book amount
as at December 31	$		17,056	$	18,349	$		35,405
December 31, 2023
Cost	$		32,466	$	29,941	$		62,407
Accumulated depreciation
and impairment	(		15,410)	(	11,592)	(		27,002)
	$		17,056	$	18,349	$		35,405
		Land			Buildings		Total
January 1, 2022
Cost	$		32,466	$	29,941	$		62,407
Accumulated depreciation
and impairment	(		15,410)	(	10,505)	(		25,915)
	$		17,056	$	19,436	$		36,492
2022
Opening net book amount
as at January 1	$		17,056	$	19,436	$		36,492
Depreciation charge			-	(	544)	(		544)
Closing net book amount
as at December 31	$		17,056	$	18,892	$		35,948
December 31, 2022
Cost	$		32,466	$	29,941	$		62,407
Accumulated depreciation
and impairment	(		15,410)	(	11,049)	(		26,459)
	$		17,056	$	18,892	$		35,948

~34~

• A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

	Year ended	December31
	2023	2022
Rental revenue from investment property	2,679 $	2,699 $
Direct operating expenses arising from the
investment property that generated rental
income during the year	543 $	544 $

• B. The fair value of the investment property held by the Company were $98,103 and $93,755 as of December 31, 2023 and 2022, respectively, which were based on the trading prices of nearby areas.

• C. Refer to Note 8 for further information on investment property pledged to others as collateral.

(11) Short-term borrowings

Unsecured borrowings Interest rate range	December31,2023 5,849,533 $ 1.77%~6.82%	December 31, 2022
		7,560,518 $
		1.45%~6.29%

• A. For the years ended December 31, 2023 and 2022, the interest expense recognised in profit or loss amounted to $207,335 and $147,837, respectively.

• B. As of December 31, 2023 and 2022, the Company provided collaterals for the financing facility of short-term borrowings and issued guaranteed notes as collateral in the amount of $17,276,185 and $16,771,251, respectively.

(12) Short-term notes and bills payable

		December31,2023	December31,2023		December31,2022	December31,2022
Short-term notes and bills payable		$	900,000		$	900,000
Discount on short-term notes and bills payable	(		2,105)	(		2,242)
		$	897,895		$	897,758
Coupon rate			1.98%~2.00%			1.99%~2.16%

The abovementioned commercial paper was secured by financial institutions.

(13) Bonds payable

		December	31,2023		December	31,2022
Bonds payable		$	109,000		$	467,100
Less: Discount on bonds payable	(		932)	(		10,674)
			108,068			456,426
Less: Bonds payable, current portion	(		108,068)			-
		$	-		$	456,426

~35~

• A. The issuance of domestic convertible bonds by the Company

• (a) The terms of the fourth domestic unsecured convertible bonds issued by the Company are as follows:

  • i. The Company issued $600,000, 0% fourth domestic unsecured convertible bonds, as approved by the regulatory authority. The bonds mature three years from the issue date (August 3, 2021~ August 3, 2024) and will be redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei Exchange on August 3, 2021.

  • ii. The bondholders have the right to ask for conversion of the bonds into common shares of the Company during the period from the date after three months of the bonds issue (November 4, 2021) to 40 days before the maturity date (June 24, 2024), except for the stop transfer period as specified in the terms of the bonds or the laws/regulations. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

  • iii. The conversion price of the bonds is set up based on the pricing model in the terms of the bonds, and the conversion price is NT$29. Since the Company distributed cash dividends, the conversion price should be adjusted at the ex-dividend date in accordance with Article 11 of the terms of the bonds. On July 16, 2022, and July 17, 2023, the Company adjusted the conversion price to NT$26.15 and NT$23.96 (in dollars), respectively.

  • iv. The Company may repurchase all the bonds outstanding in cash at the bonds’ face value at any time after the following events occur: (i) the closing price of the Company’s common shares is above the then conversion price by 30% for 30 consecutive trading days during the period from the date after three months of the bonds issue (November 4, 2021) to 40 days before the maturity date (June 24, 2024), or (ii) the outstanding balance of the bonds is less than 10% of the total initial issue amount during the period from the date after three months of the bonds issue to 40 days before the maturity date.

  • v. Under the terms of the bonds, all bonds redeemed (including bonds repurchased from the Taipei Exchange), matured and converted are retired and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.

• (b) For the years ended December 31, 2023 and 2022, the bonds totaling $358,100 and $132,900 had been converted into 14,202 thousand and 4,665 thousand shares of common stock, respectively. Accordingly, the Company recognised capital surplus of $255,970 and $98,805, and reduced capital surplus - share options by $45,123 and $16,747, respectively.

~36~

• (c) As of December 31, 2023, the bonds totaling $491,000 (face value) had been converted into 18,867 thousand shares of common stock. Accordingly, the Company recognised capital surplus of $354,775 and reduced capital surplus - share options by $61,870. The registration of bonds with a total face value of $106,700 which had been converted into 4,453 thousand common shares has not yet been completed, and was shown as ‘certificate of entitlement to new shares from convertible bonds’ in the amount of $44,532.

• (d) As of December 31, 2023, there were no convertible bonds repurchased by the Company from the Taipei Exchange.

• B. Regarding the issuance of convertible bonds, the equity conversion options of the fourth domestic unsecured convertible bonds amounting to $13,735 as of December 31, 2023 were separated from the liability component and were recognised in ‘capital surplus—share options’ in accordance with IAS 32. The call options embedded in bonds payable were separated from their host contracts and were recognised in ‘financial assets at fair value through profit or loss’ in net amount in accordance with IFRS 9 because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts. The effective interest rate of the bonds payable after such separation was 1.46%.

(14) Pensions

• A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.

• (b) The amounts recognised in the balance sheet are as follows:

		December	31, 2023		December	31,2022
Present value of defined benefit obligations		$	87,442		$	86,133
Fair value of plan assets	(		29,053)	(		15,029)
Net defined benefit liability		$	58,389		$	71,104

~37~

(c) Movements in net defined benefit liabilities are as follows:

	Present value of	Present value of
	defined benefit				Fair value of		Net defined
		obligations			planassets	benefitliability
2023
Balance at January 1	($	86,133)		$	15,029	($	71,104)
Interest (expense) income	(	1,055)			168	(	887)
	(	87,188)			15,197	(	71,991)
Remeasurements:
Return on plan assets		-			263		263
Change in demographic
assumptions	(	51)			-	(	51)
Change in financial assumptions	(	351)			-	(	351)
Experience adjustments	(	4,474)			-	(	4,474)
	(	4,876)			263	(	4,613)
Pension fund contribution		-			14,615		14,615
Paid pension		4,622	(		1,022)		3,600
Balance at December 31	($	87,442)		$	29,053	($	58,389)
	Present value of
	defined benefit				Fair value of		Net defined
		obligations			planassets	benefitliability
2022
Balance at January 1	($	87,812)		$	13,500	($	74,312)
Interest (expense) income	(	603)			84	(	519)
	(	88,415)			13,584	(	74,831)
Remeasurements:
Return on plan assets		-			1,280		1,280
Change in demographic
assumptions	(	572)			-	(	572)
Change in financial assumptions		4,056			-		4,056
Experience adjustments	(	1,217)			-	(	1,217)
		2,267			1,280		3,547
Pension fund contribution		-			180		180
Paid pension		15	(		15)		-
Balance at December 31	($	86,133)		$	15,029	($	71,104)

~38~

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2023 and 2022 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Year ended December 31	Year ended December 31
	2023 1.20% 2.00%	2022
		1.25%
		2.00%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with statistics and experience of the 6th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Increase0.25% Decrease0.25% December 31, 2023 Effect on present value of defined benefit obligation 1,734) ($ 1,789 $ December 31, 2022 Effect on present value of defined benefit obligation 1,769) ($ 1,828 $ Discount rate	Future salaryincreases	Future salaryincreases
	Increase0.25% Decrease0.25% 1,770 $ 1,725 ($ 1,809 $ 1,760 ($	Decrease0.25%

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

~39~

• (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2024 amount to $1,300.

• (g) As of December 31, 2023, the weighted average duration of the retirement plan is 8 years. The analysis of timing of the future pension payment was as follows:

Within 1 year 1-2 year(s) 2-5 years Over 5 years	3,488 $ 4,772 28,407 59,563 96,230 $

• B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount not lower than 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

  • (b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2023 and 2022 were $16,863 and $16,691, respectively.

• (15) Share capital

• A. As of December 31, 2023, the Company’s authorised capital was $3,500,000, consisting of 350 million shares of ordinary stock (including 20 million shares reserved for employee stock options), and the paid-in capital was $2,282,388 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

• B. Movements in the number of the Company’s ordinary shares (including certificate of entitlement to new shares from convertible bonds) outstanding are as follows:

At January 1 Shares converted from bonds At December 31	2023 Shares(in thousands) 218,490 14,202 232,692	2022
		Shares(in thousands)
		213,825 4,665
		218,490

• C. Information related to the conversion of the bonds into common shares of the Company for the years ended December 31, 2023 and 2022 is provided in Note 6(13).

~40~

(16) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

At January 1 Conversion of convertible bonds At December 31 At January 1 Conversion of convertible bonds At December 31	Share premium 977,543 $ 255,970 1,233,513 $	Share options 58,858 $ 45,123) ( 13,735 $ 2023 2022	Others 82,143 $ - 82,143 $	Total 1,118,544 $ 210,847
				1,329,391 $
	Share premium 878,738 $ 98,805 977,543 $	Share options 75,605 $ 16,747) ( 58,858 $	Others 82,143 $ - 82,143 $	Total
				1,036,486 $ 82,058
				1,118,544 $

(17) Retained earnings / events after the balance sheet date

• A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve, and setting aside or reversal of special reserve in accordance with related laws, if any. The remaining earnings are the distributable earnings for the year.

B. Dividend policy:

• (a) The distribution of dividends shall be above 50% of the current year’s distributable earnings and the cash dividends distributed shall not be lower than 20% of the current actual earnings distributed.

• (b) The Board of Directors is authorised to distribute all or part of the dividends and bonus in cash through a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors which shall be reported to the shareholders during their meeting.

• (c) When the Company has no deficit, the Board of Directors is authorised to distribute all or part of the legal reserve (for the part that exceeds 25% of paid-in capital) and capital surplus if it meets the requirements under the Company Act in cash through a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors which shall be reported to the shareholders during their meeting.

~41~

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• E. The appropriations of 2022 and 2021 earnings as resolved by the shareholders on June 9, 2023 and June 8, 2022, respectively are as follows:

Legal surplus Cash dividends	Dividend per share Amount (in dollars) 87,502 $ 660,390 3.00 $ 747,892 $ 2022	2021
		Dividend per share Amount (in dollars) 87,759 $ 748,387 3.50 $ 836,146 $

• F. Events after the balance sheet date

On March 8, 2024, the Company’s Board of Directors proposed the distribution of 2023 earnings and cash payment from capital surplus as follows:

Legal surplus Cash dividends Cash payment from capital surplus		2023
	Amount 54,222 $ 420,070 474,292 $	Dividend per share (indollars)
		1.80 $ 2023
	Amount 46,675 $	Cash payment pershare (indollars)
		0.20 $

The aforementioned appropriation of 2023 earnings and cash payment from capital surplus have not yet been reported to the shareholders.

(18) Operating revenue

Revenue from contracts with customers	YearendedDecember31	YearendedDecember31
	2023 14,367,156 $	2022
		19,452,860 $

~42~

A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods at a point in time in the following geographical regions:

Year ended December 31,2023 China Revenue from external customer contracts 9,256,044 $ Year ended December 31,2022 China Revenue from external customer contracts 13,690,867 $	Taiwan 3,906,191 $ Taiwan 4,417,535 $	Others 1,204,921 $ Others 1,344,458 $	Total
			14,367,156 $
			Total
			19,452,860 $

B. Contract liabilities (shown as ‘other current liabilities’)

As of December 31, 2023 and 2022, the Company has recognised revenue-related contract liabilities in the amounts of $8,228 and $11,516, respectively.

(19) Other income

Dividend income Advertising income Rent income Other income	Year ended December 31
	2023 2022 26,077 $ 11,348 $ 12,569 12,713 7,323 7,130 14,730 24,627 60,699 $ 55,818 $

(20) Other gains and losses

Foreign exchange gains (losses) Gains on financial assets at fair value through profit or loss Gains on disposals of property, plant and equipment	YearendedDecember31	YearendedDecember31
	2023 2022 65,839 $ 27,165) ($ 2,990 1,155 - 9 68,829 $ 26,001) ($	2022

~43~

(21) Expenses by nature

Employee benefit expense Salary expenses Labour and health insurance fees Pension costs Directors’ remuneration Other personnel expenses Depreciation Amortisation	2023 2022 399,948 $ 427,992 $ 32,746 31,736 17,750 17,210 19,360 26,390 16,529 16,702 486,333 520,030 13,125 11,459 3,584 3,255 503,042 $ 534,744 $ YearendedDecember31

As at December 31, 2023 and 2022, the Company had 373 and 375 employees, respectively. There were 7 and 6 non-employee directors, respectively.

Note: The abovementioned expenses were all operating expenses.

• A. (a) Average employee benefit expense were $1,276 and $1,338 for the years ended December 31, 2023 and 2022, respectively.

• (b) Average employees’ salaries were $1,093 and $1,160 for the years ended December 31, 2023 and 2022, respectively.

• (c) Adjustment of average employees’ salaries was (6%) for the year ended December 31, 2023.

• B. The Company has no supervisors’ remuneration as it has set up an audit committee.

• C. Remuneration policy of the Company (including directors, managers and employees):

• (a) Directors’ remuneration policy

In accordance with the Articles of Incorporation of the Company, remuneration of the Company’s directors is determined by the Board of Directors based on the assessment of the remuneration committee according to their participation in the operations of the Company and the value of their contribution and by reference to general pay levels in the industry. The Articles of Incorporation of the Company also prescribes that no more than 3% of the profit of the current year shall be distributed as directors’ remuneration.

• (b) Managers’ remuneration policy:

Remuneration of the Company’s managers is proposed by the remuneration committee and discussed and determined by the Board of Directors based on individual performance and contribution to the overall operations of the Company, taking into consideration the Company’s future operating risk and general pay levels in the industry.

~44~

(c) Employees’ compensation policy

• i. The Company follows the Labor Standards Act and related regulations to formulate salaries and benefits for employees. Employees’ compensation includes monthly salaries, quarterly sales bonuses, employees’ compensation and performance bonus which are distributed based on a certain percentage of the Company’s distributable profit.

• ii. In accordance with the Articles of Incorporation of the Company, 3%~12% of the current year’s earnings, if any, shall be distributed as employees’ compensation. If the Company has accumulated deficit, earnings should be reserved to cover losses before calculating the distribution. The employees’ compensation shall be distributed in the form of shares or in cash to employees including the employees of subsidiaries who meet certain specific requirements.

• D. The Company’s directors’ remuneration and employees’ compensation accounted as operating expenses were as follows:

Directors’ remuneration Employees’ compensation	Year ended December 31
	2023 2022 19,000 $ 26,000 $ 22,000 32,000 41,000 $ 58,000 $

• E. For the year ended December 31, 2023, the employees’ compensation and directors’ remuneration were estimated and accrued based on a certain percentage of distributable profit of current year as of the end of reporting period.

• F. The directors’ remuneration and employees’ compensation for 2023 as resolved by the Board of Directors on March 8, 2024 were in agreement with those amounts recognised in the financial statements. The employees’ compensation will be distributed in the form of cash.

• G. Directors’ remuneration and employees’ compensation for 2022 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2022 financial statements.

• H. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(22) Finance costs

Interest expense Convertible bonds Other interest expense	YearendedDecember31	YearendedDecember31
	2023 207,335 $ 4,534 19,230 231,099 $	2022
		147,837 $ 7,364 6,952
		162,153 $

~45~

(23) Income taxes

A. Income tax expense

(a) Components of income tax expense:

Current tax: Currrent tax on profits for the year Tax on undistributed earnings Prior year income tax under estimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense	2023 2022 95,046 $ 193,574 $ 5,563 - 1,609 13,444 102,218 207,018 40,509 99,784) ( 142,727 $ 107,234 $ YearendedDecember31

• (b) The income tax relating to components of other comprehensive income is as follows:

Remeasurement of defined benefit obligations	2023 2022 922 $ 709) ($ YearendedDecember31

B. Reconciliation between income tax expense and accounting profit:

Tax calculated based on profit before tax and statutory tax rate Effects from items disallowed by tax regulation Tax on undistributed earnings Prior year income tax under estimation Income tax expense	2023 2022 119,740 $ 164,361 $ 15,815 70,571) ( 5,563 - 1,609 13,444 142,727 $ 107,234 $ YearendedDecember31	2023 2022 119,740 $ 164,361 $ 15,815 70,571) ( 5,563 - 1,609 13,444 142,727 $ 107,234 $ YearendedDecember31
		107,234 $

~46~

C. Amounts of deferred tax assets or liabilities as a result of temporary differences is as follows:

					2023	2023	2023
						Recognised in
								other
				Recognised in		comprehensive
			January1	profit	or loss			income		December31
Deferred tax assets
(liabilities):
Unrealised loss on valuation		$	146,259	($	41,634)		$	-		$	104,625
and slow-moving
inventories
Unrealised actuarial loss on
defined benefit plan			6,885		-			922			7,807
Allowance for uncollectible
accounts in excess of
allowable limit			-		1,114			-			1,114
Share of profit of
subsidiaries accounted for
using equity method	(		114,468)		-			-	(		114,468)
Unrealised loss on doubtful
debts	(		11)		11			-			-
		$	38,665	($	40,509)		$	922	($		922)
					2022
						Recognised in
								other
				Recognised in		comprehensive
			January1	profit	or loss			income		December31
Deferred tax assets
(liabilities):
Unrealised loss on valuation		$	47,878	$	98,381		$	-		$	146,259
and slow-moving
inventories
Unrealised actuarial loss on
defined benefit plan			7,594		-	(		709)			6,885
Share of profit of
subsidiaries accounted for
using equity method	(		114,468)		-			-	(		114,468)
Unrealised loss on doubtful
debts	(		1,414)		1,403			-	(		11)
	($		60,410)	$	99,784	($		709)		$	38,665

~47~

• D. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

	December31,2023	December31,2022
Deductible temporary differences	177,560 $	130,065 $

• E. The Company’s income tax returns through 2021 have been assessed and approved by the Tax Authority.

(24) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Convertible bonds Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Convertible bonds Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares	Weighted average number of ordinary shares outstanding Profit after tax (shares in thousands) 455,974 $ 224,366 455,974 $ 224,366 - 858 3,636 12,876 459,610 $ 238,100 Year ended December31,2023 Year ended December31,2022	Weighted average number of ordinary shares outstanding Profit after tax (shares in thousands) 455,974 $ 224,366 455,974 $ 224,366 - 858 3,636 12,876 459,610 $ 238,100 Year ended December31,2023 Year ended December31,2022	Earnings per share (in dollars)
			2.03 $
			1.93 $
	Profit after tax 714,572 $ 714,572 $ - 5,891 720,463 $	Weighted average number of ordinary shares outstanding (shares in thousands) 216,541 216,541 1,313 19,811 237,665	Earnings per share(in dollars)
			3.30 $
			3.03 $

~48~

(25) Supplemental cash flow information

Convertible bonds payable Conversion of bonds payable Capital surplus of bonds payable conversion Conversion of convertible bonds payable Cash paid during the year	2023 2022 142,025 $ 46,646 $ 210,847 82,058 352,872) ( 128,704) ( - $ - $ Year ended December 31

(26) Changes in liabilities from financing activities

Short-term borrowings January 1, 2023 7,560,518 $ Changes in cash flow from financing activities 1,710,985) ( Changes in other non-cash items - December 31, 2023 5,849,533 $ Short-term borrowings January 1, 2022 6,919,778 $ Changes in cash flow from financing activities 640,740 Changes in other non-cash items - December 31, 2022 7,560,518 $	Short-term notes and Bonds payable (including Lease Liabilities from financing bills payable current portion) liabilities activities-gross 897,758 $ 456,426 $ 699 $ 8,915,401 $ 137 - 2,534) ( 1,713,382) ( - 348,358) ( 5,851 342,507) ( 897,895 $ 108,068 $ 4,016 $ 6,859,512 $ Short-term notes and Bonds payable (including Lease Liabilities from financing bills payable current portion) liabilities activities-gross 699,361 $ 577,835 $ 1,761 $ 8,198,735 $ 198,397 - 1,037) ( 838,100 - 121,409) ( 25) ( 121,434) ( 897,758 $ 456,426 $ 699 $ 8,915,401 $	Liabilities from financing activities-gross
		8,915,401 $

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Refer to Note 4(3)B of the consolidated financial statements.

~49~

(2) Significant related party transactions

A. Operating revenue

		Year ended	December 31	December 31
		2023		2022
Zenitron (HK) Limited	$	1,690,567	$	4,895,151
Zenitron (Shanghai) International Trading
Co., Ltd.		432,714		803,270
Others		157,136		344,327
	$	2,280,417	$	6,042,748

The sales price to related parties was determined based on initial cost plus a certain mark-up. The collection term was 60~90 days after monthly billings for related parties and 30~120 days after monthly billings for third parties.

B. Purchases

Zenitron (HK) Limited Zenicom (HK) Limited Others	Year ended December31	Year ended December31
	2023 203,028 $ 134,954 34,971 372,953 $	2022
		80,301 $ 169,247 23,435
		272,983 $

The price and term for purchases from related parties was the same with third parties. The payment term was 60~90 days after monthly billings for related parties and approximately 10~75 days after monthly billings for general suppliers.

C. Receivables from related parties

Accounts receivable Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Others Other receivables Zenitron (HK) Limited Zenicom Corporation	December31,2023 540,602 $ 47,033 15,520 603,155 $ December31,2023 622,655 $ 45,651 668,306 $	December31,2022
		792,318 $ 89,054 36,009
		917,381 $
		December31,2022
		663,174 $ 8
		663,182 $

~50~

D. Payables to related parties

December 31, 2023 December 31, 2022

	December31,2023	December31,2022
Accounts payable Zenicom (HK) Limited Zenitron (HK) Limited Others Other payables Supertronic International Corp. ZTHC (Shanghai) Co., Ltd.	43,448 $ 39,817 496 83,761 $ December31,2023 172,228 $ - 172,228 $	23,762 $ 19,981 1,072
		44,815 $
		December 31, 2022
		172,221 $ 222,035
		394,256 $

• E. Loans to / from related parties

• (a) Loans to related parties

i. Outstanding balance

Zenitron (HK) Limited Zenicom Corporation

December31,2023 613,100 $ 44,853 657,953 $	December31,2022
	613,200 $ -
	613,200 $

ii. Interest income

Zenitron (HK) Limited Zenicom Corporation ZTHC (Shanghai) Co., Ltd.

Year ended December31	Year ended December31
2023 14,485 $ 1,017 - 15,502 $	2022
	613 $ 134 4,497
	5,244 $

• (b) Loans from related parties

• i. Outstanding balance

Supertronic International Corp. ZTHC (Shanghai) Co., Ltd.	December31,2023 172,228 $ - 172,228 $	December31,2022
		172,051 $ 221,650
		393,701 $

~51~

ii. Interest expense

		Year ended	December31	December31
		2023		2022
ZTHC (Shanghai) Co., Ltd.	$	4,993	$	380
Supertronic International Corp.		-		384
	$	4,993	$	764

F. Endorsements and guarantees provided to related parties

Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. ZTHC (Shanghai) Co., Ltd. Zenicom Corporation		December31,2023 799,452 $ 390,699 125,582 - 16,410 1,332,143 $	December 31, 2022 1,090,492 $ 465,040 221,357 123,424 100 1,900,413 $

For the years ended December 31, 2023 and 2022, the service fee income (shown as other income) charged by the Company for providing endorsements and guarantees to related parties amounted to $8,675 and $9,737, respectively.

G. Key management compensation

Salaries, short-term employee benefits and post-employment benefits	YearendedDecember31	YearendedDecember31
	2023 84,387 $	2022
		91,781 $

8. PLEDGED ASSETS

The Company’s assets pledged as collateral are as follows:

Pledged assets Investment property Guarantee deposits paid (shown as ‘other non-current assets’)	December 31, December 31, 2023 2022 Purpose 2,710 $ 2,788 $ Short-term borrowings 10,000 10,000 Court deposits 12,710 $ 12,788 $ Bookvalue
	December 31, 2023 2,710 $ 10,000 12,710 $

~52~

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

(1) Contingencies

None.

(2) Commitments

As of December 31, 2023, other significant commitments were as follows:

As a requirement for the release of imported goods before duty and customs clearance, the Company has applied for customs guarantee with certain banks in the amount of $20,000.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

Refer to Note 6(17).

12. OTHERS

(1) Capital risk management

The Company’s main objective when managing capital is to maintain an optimal credit ranking and capital ratio to support the operations and to maximize stockholders’ equity. Refer to the parent company only balance sheet of each period for related liabilities and capital ratio.

(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument	December31,2023 78,599 $ 521,046 $	December31,2022
		24,110 $
		573,371 $

~53~

Financial assets at amortised cost/receivables Cash and cash equivalents Notes receivable Accounts receivable (including related parties) Other receivables (including related parties) Guarantee deposits paid (shown as ‘other non-current assets’) Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other accounts payable (including related parties) Bonds payable (including current portion) Guarantee deposits received (shown as ‘other non-current liabilities’) Lease liabilities	December31,2023 803,025 $ 6,340 4,232,577 718,091 42,048 5,802,081 $ 5,849,533 $ 897,895 2,537 2,034,558 489,552 108,068 3,029 9,385,172 $ 4,016 $	December31,2022
		689,960 $ 11,996 4,887,902 722,642 41,119 6,353,619 $ 7,560,518 $ 897,758 2,477 1,322,858 729,744 456,426 1,298
		10,971,079 $
		699 $

• B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s financial risk management policies is to identify and analyse all the risks by examining the impact of the macroeconomics, industrial developments, market competition and the Company’s business development so as to achieve the optimised risk position, to maintain adequate liquidity position and to centralise the management of all market risks.

• (b) Risk management is carried out by a central treasury department under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters.

~54~

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Company operates internationally and is exposed to foreign exchange risk arising from various currency, primarily with respect to the USD. Foreign exchange rate risk arises from future commercial transactions and recognised assets, liabilities and net investments in foreign operations.

• ii. The Company’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies and market risk whose values would be materially affected by the exchange rate fluctuations is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD JPY Investments accounted for using equity method USD HKD Financial liabilities Monetary items USD JPY		December31,2023	December31,2023
	Foreign currency amount (In thousands) 175,119 $ 255,996 94,295 $ 138,561 123,831 $ 65,751	Exchange rate 30.66 0.22 30.71 3.93 30.76 0.22	Book value (In thousands of NTD) 5,369,149 $ 56,319 2,895,340 $ 544,405 3,809,042 $ 14,465	Sensitivityanalysis
				Degree of variation 1% 1% - - 1% 1%	Effect on profit or loss
					53,691 $ 563 - - 38,090 $ 145

~55~

December 31, 2022

==> picture [436 x 241] intentionally omitted <==

----- Start of picture text -----

Sensitivity analysis
Foreign
currency Book value
(Foreign currency: amount Exchange (In thousands Degree of Effect on
functional currency) (In thousands) rate of NTD) variation profit or loss
Financial assets
Monetary items
USD $ 189,859 30.66 $ 5,821,077 1% $ 58,211
JPY 257,165 0.23 59,148 1% 591
HKD 10,932 3.91 42,744 1% 427
Investments
accounted for
using equity method
USD $ 93,528 30.71 $ 2,872,256 - -
HKD 153,995 3.94 606,433 - -
Financial liabilities
Monetary items
USD $ 142,855 30.76 $ 4,394,200 1% $ 43,942
RMB 50,087 4.43 221,885 1% 2,219
JPY 201,648 0.23 46,379 1% 464
----- End of picture text -----

• iii. The total exchange gain (loss), including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2023 and 2022, amounted to $65,839 and ($27,165), respectively.

Price risk

• i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• ii. The Company’s investments in equity securities comprise shares by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2023 and 2022 would have increased/decreased by $463 and $241, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $5,210 and $5,734, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Company’s main interest rate risk arises from short-term borrowings and short-term notes and bills payable with variable rates, which expose the Company to cash flow interest rate risk.

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• ii. The Company’s borrowings are measured at amortised cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

• iii. If the borrowing interest rate had increased/decreased by 1% with all other variables held constant, profit, net before tax for the years ended December 31, 2023 and 2022 would have increased/decreased by $67,474 and $84,583, respectively. The main factor is that changes in interest expense result from floating rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Company’s credit policy, the Company is responsible for managing and analysing the credit risk for each of their clients. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. The utilisation of credit limits is regularly monitored. Credit risk arises from credit exposures to customers, including outstanding receivables.

• ii. The Company adopts the following assumptions to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

  • (i) If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

  • (ii) If any external credit rating agency rates these bonds as investment grade, the credit risk of these financial assets is low.

iii. The default occurs when the contract payments are past due over 60 days.

• iv. The Company classifies customer’s accounts receivable in accordance with the credit rating of the customer. The Company applies the modified approach using a provision matrix to estimate the expected credit loss.

• v. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights.

• vi. The Company used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. Refer to Note 6(4) for details of the provision matrix and movements in loss allowance for the years ended December 31, 2023 and 2022.

~57~

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets.

• ii. Except for those listed in the table below, the Company’s non-derivative financial liabilities will expire within 1 year. As of December 31, 2023 and 2022, the cash flows within 1 year of short-term notes and bills payable, notes payable, accounts payable (including related parties) and other payables (including related parties) are undiscounted and are in agreement with the balance of each account in the balance sheet.

December 31, 2023 Non-derivative financial liabilities: Short-term borrowings Lease liabilities Bonds payable (including current portion) December 31, 2022 Non-derivative financial liabilities: Short-term borrowings Lease liabilities Bonds payable (including current portion)	Less than 1year 5,859,317 $ 2,979 109,000 Less than 1year $ 7,574,718 575 -	Between 2 and 5 years Over 5 years - $ - $ 1,093 - - - Between 2 and 5 years Over 5 years $ - - $ 129 - 467,100 -

• iii. The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

~58~

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market refers to a market in which transactions for an asset or liability take place with enough frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and OTC stocks is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market, convertible bonds, beneficiary certificates and the Company’s call options of convertible bonds is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(10).

• C. Financial instruments not measured at fair value

• (a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable (including related parties), other receivables (including related parties), short-term borrowings, short-term notes and bills payable, notes payable, accounts payable (including related parties) and other payables (including related parties) are approximate to their fair values.

Financial liabilities Bonds payalbe (including current portion) Financial liabilities Bonds payalbe (including current portion)		December	31,2023
	Bookvalue 108,068 $		Fairvalue
		Level 1 - $ December	Level 2 108,019 $ 31,2022	Level3
				- $
	Bookvalue 456,426 $		Fairvalue
		Level 1 - $	Level 2 452,534 $	Level3
				- $

• (b) The methods and assumptions of fair value estimate are as follows:

Bonds payable: They are measured at present value, which is calculated based on the cash flow expected to be paid and discounted using a market rate prevailing at balance sheet date.

~59~

• D. Financial and non-financial instruments measured at fair value

• (a) The related information on financial and non-financial instruments measured at fair value by level based on the nature, characteristics and risks of the assets and liabilities are as follows:

December 31, 2023 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks 32,651 $ Redemption of convertible bonds - Beneficiary certificates - Hybrid instruments- convertible bonds - Financial assets at fair value through other comprehensive income Listed stocks 432,408 Emerging stocks 790 Unlisted stocks - 465,849 $ December 31, 2022 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks 16,947 $ Beneficiary certificates - Redemption of convertible bonds - Financial assets at fair value through other comprehensive income Listed stocks 475,301 Emerging stocks 810 Unlisted stocks - 493,058 $	Level 2 - $ - - - - - - - $ Level 2 - $ - - - - - - $	Level3 - $ - 13,624 32,324 - - 87,848 133,796 $ Level3 - $ 7,116 47 - - 97,260 104,423 $	Total
			32,651 $ - 13,624 32,324 432,408 790 87,848
			599,645 $
			Total
			16,947 $ 7,116 47 475,301 810 97,260
Financial assets at fair value through profit or loss Listed stocks Beneficiary certificates Redemption of convertible bonds Financial assets at fair value through other comprehensive income Listed stocks Emerging stocks Unlisted stocks
			597,481 $

(b) The methods and assumptions the Company used to measure fair value are as follows:

• i. For the instruments the Company used market quoted prices as their fair values (that is, Level 1), the Company uses the closing price as market quoted price.

~60~

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the parent company only balance sheet date.

• iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk etc. In accordance with the Company’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the parent company only balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• iv. The Company considers adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Company’s credit quality.

• E. As of December 31, 2023 and 2022, there was no transfer between Level 1 and Level 2.

• F. The following chart is the movement of Level 3 for the years ended December 31, 2023 and 2022:

			2023	2023				2022	2022
			Non-	Redemption of				Non-	Redemption of
		derivative		of	convertible		derivative		of	convertible
		instrument			bonds		instrument			bonds
At January 1		$	104,376	$	47		$	74,814	$	300
Increase during the year			39,824		-			37,420		-
Decrease during the year			-	(	21)	(		7,474)	(	68)
Recorded as unrealised losses on
valuation of investments in
equity instruments measured at
fair value through other
comprehensive income	(		9,412)		-			-		-
Losses recognised in profit or loss	(		992)	(	26)	(		384)	(	185)
At December 31		$	133,796	$	-		$	104,376	$	47

~61~

• G. Investment segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• H. The following is the qualitative information on significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non-derivative equity instrument: Unlisted shares Unlisted shares Hybrid instruments- convertible bonds Beneficiary certificates Redemption of convertible bonds	Fair value at December 31,2023	Fair value at December 31,2023	Valuation technique Significant unobservable input Net asset value Net asset value Most recent non-active market price Not applicable Most recent non-active market price Not applicable Net asset value Net asset value Binomial model Volatility	Range (weighted average)	Relationship of inputs to fair value
		588 $ 87,260 32,324 13,624 - 133,796 $		Not applicable Not applicable Not applicable Not applicable 13.46%	The higher the net asset value, the higher the fair value Not applicable Not applicable The higher the net asset value, the higher the fair value The higher the volatility, the higher the fair value

~62~

Non-derivative equity instrument: Unlisted shares Unlisted shares Beneficiary certificates Redemption of convertible bonds	Fair value at December 31,2022 Valuation technique 10,000 $ Net asset value 87,260 Most recent non-active market price 7,116 Net asset value 47 Binomial model 104,423 $	Significant unobservable input Range (weighted average) Relationship of inputs to fair value Net asset value Not applicable The higher the net asset value, the higher the fair value Not applicable Not applicable Not applicable Net asset value Not applicable The higher the net asset value, the higher the fair value Volatility 19.97% The higher the volatility, the higher the fair value

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: Refer to table 1.

• B. Provision of endorsements and guarantees to others: Refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Refer to table 5.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Refer to table 6.

~63~

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Refer to table 8.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Refer to Notes 13(1) A, B and J.

(4) Major shareholders information

The Company has no shareholders with a shareholding ratio above 5%.

14. SEGMENT INFORMATION

None.

~64~

ZENITRON CORPORATION STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 1

==> picture [508 x 15] intentionally omitted <==

----- Start of picture text -----

Item Description Amount
----- End of picture text -----

Cash on hand and revolving funds Cash in banks Checking accounts Demand deposits - NTD Demand deposits - foreign currency USD 16,056 thousand Exchange rate 30.66 JPY 177,395 thousand Exchange rate 0.215 Others	95 $ 43,591 227,733 492,211 38,175 1,220 803,025 $

Statement 1, Page 1

ZENITRON CORPORATION STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 2

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----- Start of picture text -----

Client Name Amount Note
Non-related parties
Company A $ 291,003
Company B 188,182
Balance of each client
has not exceeded 5% of
Others 3,198,791 total account balance
3,677,976
Less: Allowance for uncollectible accounts ( 48,554)
$ 3,629,422
----- End of picture text -----

Statement 2, Page 1

ZENITRON CORPORATION STATEMENT OF INVENTORIES DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 3

Statement 3
			Amount
Item			Cost	Net	Realizable Value	Note
Merchandise		$	5,075,577	$	4,552,450
Inventory in transit			183,692		183,692
			5,259,269	$	4,736,142
Less: Allowance for market value decline and loss on
obsolete and slow-moving inventories	(		523,127)
		$	4,736,142

Statement 3, Page 1

ZENITRON CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 4

Statement 4
Name of Investee	Beginning	Amount Shares (in thousands) Amount (Note) Balance Addition		Decrease	EndingBalance		Market Value or Net Assets Value	Collateral Note
	Shares (in thousands)			Shares (in thousands) Amount (Note)	Shares (in thousands) Percentage of Ownership	Amount	Unit Price Total Amount
Supertronic International Corp. Zenitron (HK) Limited Zenicom Corporation	100 22,373 16,520	2,872,256 $ - 606,433 - 168,645 - 3,647,334 $	23,084 $ - 7,496 30,580 $	- - $ - 62,028) ( - - 62,028) ($	100 100% 22,373 100% 16,520 100%	2,895,340 $ 544,405 176,141 3,615,886 $	28,953.40 $ 234,568 $ 24.33 3,205,177 10.66 176,141	None " "

Note: The amount includes change in investee’s net equity value and profit (loss) of subsidiaries accounted for using equity method.

Statement 4, Page 1

ZENITRON CORPORATION STATEMENT OF SHORT-TERM BORROWINGS DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 5

Statement 5
Creditor	Description		EndingBalance	Contract Period	Range of Interest Rate	Credit Line	Collateral	Note
Hua Nan Bank Taiwan Cooperative Bank First Commercial Bank Shanghai Commercial and Savings Bank Far Eastern International Bank Taishin Bank Shin Kong Bank Cathay United Bank Bank of Taiwan Bank of Kaohsiung Taipei Fubon Bank Chang Hwa Bank Taiwan Business Bank Land Bank of Taiwan Mega International Commercial Bank Yuanta Bank Taichung Commercial Bank EnTie Bank E.SUN Bank	Unsecured borrowings 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞		1,213,359 $ 833,625 750,000 451,950 400,000 300,000 300,000 219,790 200,000 200,000 147,340 140,000 126,895 100,000 100,000 100,000 100,000 100,000 66,574 5,849,533 $	2023/7/28~2024/7/28 2023/5/3~2024/12/14 2023/7/28~2024/7/28 2023/8/10~2024/6/12 2023/10/23~2024/4/12 2023/12/20~2024/2/20 2023/11/30~2023/12/30 2023/12/20~2024/4/26 2023/11/9~2024/5/7 2023/10/13~2024/1/11 2023/12/27~2024/6/24 2023/12/25~2024/6/22 2023/11/28~2024/2/26 2023/12/15~2024/3/14 2023/12/25~2024/3/22 2023/11/27~2024/2/23 2023/11/17~2024/2/17 2023/10/12~2024/1/10 2023/10/16~2024/1/16	Note 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	2,100,000 $ 1,000,000 1,030,000 600,000 500,000 850,000 300,000 450,000 600,000 300,000 570,000 600,000 650,000 600,000 700,000 600,000 400,000 300,000 650,000	Note 8 None 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	Undrawn secured borrowing facilities 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞

Note: Range of interest rate of the Company’s borrowings was 1.77%~6.82%.

Statement 5, Page 1

ZENITRON CORPORATION STATEMENT OF SHORT-TERM NOTES AND BILLS PAYABLE DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 6

Statement 6
Commercial paper payable International Bills Finance Corporation Mega Bills Finance Co., Ltd. China Bills Finance Corporation Dah Chung Bills Finance Corporation Item Guarantor or Accepting Institution	2023/11/8~2024/1/5 1.998% 2023/12/19~2024/2/1 1.998% 2023/12/15~2024/2/2 1.988% 2023/11/7~2024/1/5 1.998% Contract Period Range of Interest Rate				Amount	Collateral None 〞 〞 〞 Note
			Issuance Amount		Unamortized Discount CarryingAmount 559 $ 199,441 $ 436 199,564 544 299,456 566 199,434 2,105 $ 897,895 $
			200,000 $ 200,000 300,000 200,000 900,000 $

Statement 6, Page 1

ZENITRON CORPORATION

STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 7

Statement 7
Supplier Name		Amount	Note
Non-related parties Company A Company B Company C Company D Company E Company F Company G Others		337,588 $ 305,790 281,354 256,533 199,389 170,150 153,119 246,874 1,950,797 $	Balance of each supplier has not exceeded 5% of total account balance

Statement 7, Page 1

ZENITRON CORPORATION STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 8

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Item Volume (in thousands) Amount Note
Sales revenue
Memory cards 19,104 $ 3,097,708
Linear integrated circuit 282,328 3,004,542
Digital integrated circuit 105,327 1,526,698
Power field effect transistors 611,925 2,050,770
Logic integrated circuit 71,448 1,607,816
Diodes 970,342 690,394
Others 794,282 2,389,228
Net operating revenue $ 14,367,156
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Statement 8, Page 1

ZENITRON CORPORATION

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 9

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Item Amount
Beginning inventory $ 6,224,617
Add: Net purchases for the year 12,178,897
Processing fees 5,673
Less: Ending inventory ( 5,259,269)
Obsolete and slow-moving inventory sold ( 24,283)
Transferred to operating expenses ( 4,907)
Cost of goods sold 13,120,728
Gain on reversal of market value ( 183,886)
$ 12,936,842
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Statement 9, Page 1

ZENITRON CORPORATION STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 10

Statement 10
Item Wages and salaries Export (customs) expense Insurance Other expenses	Selling Administrative 306,074 $ 130,984 $ 57,495 - 23,950 17,601 94,951 75,348 482,470 $ 223,933 $	Total 437,058 $ 57,495 41,551 170,299 706,403 $	Note
			Balance of each account has not exceeded 5% of total account balance

Statement 10, Page 1